In this article, we will check out the 10 stocks receiving downgrades from analysts. If you want to see more such rating downgrades, go directly to Analysts are Downgrading These 5 Stocks.
Stock markets are under pressure ahead of Jerome Powell’s speech on Wednesday and Beijing’s renewed mobility restrictions. Meanwhile, protests broke out across several big cities in China against the government’s zero-Covid strategy. Apple Inc. (NASDAQ:AAPL) is also in the red following reports which suggested the company would likely miss the production target for iPhone 14 Pro by 6 million. The shortfall is attributed to production delays at its biggest iPhone manufacturing facility in China.
Meanwhile, First Solar, Inc. (NASDAQ:FSLR), Twilio Inc. (NYSE:TWLO) and Aptiv PLC (NYSE:APTV) are also down after receiving downgrades from analysts.
Moreover, analysts also recently lowered their ratings for Chinese EV maker XPeng Inc. (NYSE:XPEV) and sports betting company DraftKings Inc. (NASDAQ:DKNG). Check out the remaining article to see the details of these downgrades.
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10. Beyond Meat, Inc. (NASDAQ:BYND)
Number of Hedge Fund Holders: 14
Shares of Beyond Meat, Inc. (NASDAQ:BYND) slid over three percent yesterday after Barclays cut its ratings for the plant-based meat company from “Equal-Weight” to “Underweight.”
Analyst Benjamin Theurer pointed towards a difficult outlook for protein-focused companies, including Beyond Meat, Inc. (NASDAQ:BYND). He reduced his price target for BYND stock from $13 per share to $10 per share.
Theurer believes price-conscious customers are switching to cheaper protein options and avoiding expensive alternative meat products from companies like Beyond Meat, Inc. (NASDAQ:BYND). He also predicted a tougher operating environment for the industry over the next few years.
9. Lufax Holding Ltd (NYSE:LU)
Number of Hedge Fund Holders: 14
Shares of Lufax Holding Ltd (NYSE:LU) plunged to a new low on Friday, November 25, after Credit Suisse downgraded the Chinese personal financial services platform from “Neutral” to “Underperform.”
Analyst Frank Zheng was primarily moved by the company’s lower-than-expected results for Q3 and a weak outlook for the full year. Zheng also trimmed his price target for Lufax Holding Ltd (NYSE:LU) from $1.70 per share to $1.40 per share.
Lufax Holding Ltd (NYSE:LU) recently reported earnings of 16 cents per share for Q3, marginally below the consensus of 17 cents. Total net income of $1.86 billion also fell short of $1.99 billion estimated by analysts.
For the full year, Lufax Holding Ltd (NYSE:LU) expects its net profit to drop in the range of 47 – 48 percent on a year-over-year basis.
8. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Holders: 20
XPeng Inc. (NYSE:XPEV) came into the spotlight recently after Jefferies turned bearish on the Chinese electric vehicle (EV) maker. The research firm downgraded XPeng stock from “Hold” to “Sell,” citing intense competition and increasing lithium prices.
Lithium is one of the key elements used in EV batteries. Its prices are currently up nearly 200 percent when compared to the same period of 2021. Jefferies analyst Johnson Wan thinks increasing lithium prices and removal of subsidies for EV manufacturers in China would likely hurt the margins of XPeng Inc. (NYSE:XPEV).
Wan also pointed towards the higher prices of XPeng cars. Moreover, he reduced his price target for XPeng Inc. (NYSE:XPEV) from $18.60 per share to $4.20 per share.
7. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 34
Shares of DraftKings Inc. (NASDAQ:DKNG) dropped nearly four percent in pre-market trading Monday after JPMorgan cut its ratings for the sports betting company from “Neural” to “Sell.”
JPMorgan analyst Joseph Greff expects DraftKings Inc. (NASDAQ:DKNG) shares to move down after their post-earnings rally earlier this month. Greff pointed towards the company’s adjusted EBITDA loss outlook of $575 – $475 million for 2023, which is wider than his estimate of around $350 million. Greff also believes DraftKings will take longer than its competitors to achieve profitability.
Like DraftKings Inc. (NASDAQ:DKNG), analysts also cut their ratings for First Solar, Inc. (NASDAQ:FSLR), Twilio Inc. (NYSE:TWLO) and Aptiv PLC (NYSE:APTV).
6. Generac Holdings Inc. (NYSE:GNRC)
Number of Hedge Fund Holders: 36
Argus downgraded Generac Holdings Inc. (NYSE:GNRC) from “Buy” to “Hold” on Friday, November 25, citing supply chain hurdles.
Analyst John Eade thinks supply-chain challenges will impact the company’s margins and revenue in the coming quarters. Nevertheless, Eade expressed optimism about the long-term growth prospects of Generac Holdings Inc. (NYSE:GNRC).
Separately, investment management Artisan Partners also discussed Generac Holdings Inc. (NYSE:GNRC) in its third-quarter 2022 investor letter. Here’s what the firm said:
“We pared our exposures to Generac Holdings Inc. (NYSE:GNRC), Azenta and Burlington Stores in Q3. Generac is a provider of residential backup generators in the US with a dominant market position. Our thesis is based on climate change causing more frequent and severe storms and power grid failures, both of which should bolster demand for Generac’s generators. In addition, the company’s residential solar backup battery business—which benefits from Generac’s scale, distribution network and differentiated go-to-market strategy—could also enhance its overall profit cycle potential over time. That said, we believe generator demand may be entering a cyclical downturn as homeowners face inflation and rising interest rates. While our longer term thesis remains intact, we believe a smaller position is warranted.”
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Disclosure: None. Analysts are Downgrading These 10 Stocks is originally published on Insider Monkey.
